A blog about business in Fort Worth and North Texas, by the staff of the Fort Worth Star-Telegram.

07/02/2013

SEC accuses Bedford man of investment fraud with energy offerings

Bret L. Boteler through his company, EnerMax, raised $17.3 million from about 260 investors in more than 40 states through fraudulent means including the sale of unregistered securities, the Securities and Exchange Commission alleges in a lawsuit. The civil suit, filed June 28, seeks to enjoin Boteler, a Bedford resident, from further violations of federal securities law, disgorge money illegally obtained and also pay any other penalties levied by a the court. None of the three telephone numbers listed publicly for Boteler and EnerMax, in Hurst, were in operation when the Star-Telegram dialed them Tuesday.

According to the SEC suit, Boteler told investors in 16 partnerships that EnerMax was an experienced energy producer when "in reality neither Boteler nor the EnerMax staff were oil-and-gas professionals." Rather, the agency says, "the only operation conducted by EnerMax was selling oil-and-gas securities." The suit alleges that between November 2007 and December 2011 EnerMax conducted 16 offers raising $17.26 million aimed at developing two West Texas prospects. While the offering circular "purported to give investors a share of management responsibility, this assignment of responsibility was illusory," the suit says, and "few if any of the 260 investors had any experience" in the energy business. And while Boteler claimed the investments were exempt from registration requirements, more than 40 investors lacked the financial resources to be considered "accredited investors" and hence the offerings "did not qualify for an exemption from registration." The projects were not profitable and Boteler used hundreds of thousands of dollars to pay himself a salary and other expenses, including $65,000 for his children's private school tuition, and invested nearly $700,000 in two unrelated businesses.